AGNC Investment Q4 Earnings Miss Estimates, Asset Yield Improves Y/Y

Core Insights - AGNC Investment Corp. reported a fourth-quarter 2024 net spread and dollar roll income per common share of 37 cents, missing the Zacks Consensus Estimate of 42 cents and declining from 60 cents in the year-ago quarter [1][2] - The company experienced a comprehensive loss per common share of 11 cents in the fourth quarter, compared to a comprehensive income of 1 cent per share in the same quarter last year [2] Financial Performance - Adjusted net interest and dollar roll income for the fourth quarter was $405 million, down 18.5% from the previous year [2] - For the full year 2024, net spread and dollar roll income per common share was$ 1.88, missing the consensus estimate of $1.95 and down from$ 2.61 in 2023 [3] - Adjusted net interest and dollar roll income for 2024 was $1.8 billion, reflecting a 9% increase from 2023 [3] Income and Expenses - Net interest income (NII) for the fourth quarter was$ 115 million, missing the Zacks Consensus Estimate by 23.7%, with net interest expenses of $26 million in the prior-year quarter [4] - For 2024, NII was reported at$ 18 million, significantly below the Zacks Consensus Estimate of $314 million, but improved from$ 246 million in net interest expenses in 2023 [4] Asset Management - The average asset yield on AGNC's portfolio increased to 5.02% in the fourth quarter, up from 4.55% in the same quarter of 2023 [4] - The combined weighted average cost of funds rose to 2.89% compared to 1.39% in the fourth quarter of 2023 [5] - The average net interest spread decreased to 1.91%, down from 3.08% in the previous quarter [5] Portfolio and Valuation - As of December 31, 2024, AGNC's investment portfolio totaled $73.3 billion, including$ 65.5 billion in Agency mortgage-backed securities [7] - The tangible net book value per common share was $8.41, down 3.3% year-over-year [6] - The economic return on tangible common equity was negative 0.6%, compared to 12.1% in the year-ago quarter [6] Dividend Information - AGNC announced a dividend of 12 cents per share for each month of the fourth quarter, totaling$ 0.36 per share [9] - Since its IPO in May 2008, the company has declared $14 billion in common stock dividends, equating to$ 48.64 per share [10] Strategic Outlook - The fourth-quarter results were positively influenced by increased asset yields and higher net interest spreads, while the company's strategic portfolio repositioning is designed to mitigate the impacts of higher interest rates and prepayments [11]